Recharging or Retiring the Older Worker? Strategies of European Employers

1. Recharging or Retiring the Older Worker? Strategies of European Employers • Kène Henkens, NIDI, The Hague, University of Amsterdam • With Harry van Dalen (NIDI) and Mo Wang (University of Florida) • NEUJOBS, Thursday 10 April 2014, Bonn

2. Age composition of the population (EU 25), 1950-2050

3. GOVERNMENTS at national and eu level • Ageingand dejuvenationrequirehigherparticipationtocombatdeclinepotentiallabour force and make welfare state sustainable • Increasinglife expectancydriving force behind extension workinglife and increase pension age

4. Extension of workinglives….

6. Supply anddemand side factors • Most research is focussed on the supply side of the labour market: Workers’ behaviours and attitudes • Few studies look at the demand side of the labour market: Employers’ behaviours and attitudes

7. Overall Aim of the ASPA project • To gain insight into effects of employers’ behaviour on the use of older workers

8. ASPA multinational setup

9. research questionsaspa project • How active are employers in stimulating labour force participation of older workers? • What are the impediments for active ageing? • What type of solutions do employers see to deal with current labour market challenges?

10. ASPA Employers survey, 2009 • Organizationswith 10 employees or more • Stratified sample sizeand sector • 6,000 employers in eightcountries • Identical questionnaire in allcountries

11. Expected increase in retirement age (%)

12. Central research question • Which types of age-based HR strategies do employers actually use? • And do different types of organizations (old, knowledge intensive, etc.) employ different strategies?

13. PersonnelEconomics • Lazear’s theory of implicit contracts

14. Dilemmas • Macro: seniority wages sensitive to age structure of staff • Micro: seniority wages imply mandatory retirement rules

15. Human resource strategies • Exit, early retirement • Accomodation • Development, investment

16. method • Structuralequationmodellingwithlatent variables: • Exit routes • Earlyretirement • Part-timeretirement • Accomodation • Reduction of working time • Decreasing workload • Ergonomic measures • Age limit for irregular work or shifts

17. ….continued • Development measures • Training plans for older workers • Promoting internal job mobility • Continuous career development

18. Descriptives • Exit routes • Early retirement (31%) • Part-time retirement (26%) • Accomodation • Reduction of working time (24%) • Decreasing workload (20%) • Ergonomic measures (33%) • Age limit for irregular work (11%) • Development measures • Training plans for older workers (19%) • Promoting internal job mobility (28%) • Continuous career development (32%)

19. Human resource strategies

20. Explanatory variables • Proportion of older workers • Organization size • Importance of seniority-based compensation • Influence of unions in HR policies • Knowledge intensity organization • Training requirements

21. Results: explaininghrstrategies

22. Conclusions • Micro-macro paradox • Employersusebothexit and retentionstrategies • Agingfirms more set on exit routes thanyoungerfirms • Large country differences • Public sector more ageconsciousthan private sector

23. Thank you for your attention! Kène Henkens Email: henkens@nidi.nl

24. Reserve slides

25. Recruitment and retention

26. European employers' perception of wages rising with tenure (%)

27. Employers' expectations with respect to the labour cost-productivity gap with an ageing staff (%)

28. OrganisationalPolicies

29. How torespondto a crisis?